Ireland is working urgently on a plan to tackle banks' exposure to risky commercial property loans as a follow-up to a 7 billion euro ($8.87 billion) recapitalisation plan for the top two lenders, the Finance Minister said on Saturday.

Dublin's efforts to support its banks have been sidelined by a string of scandals which have prompted foreign investors to steer clear of Irish equities and stoked resentment among the public, who are angry that taxpayers' funds are being used to bolster a tarnished sector.

"Bolder and more radical steps will be taken by the government to ensure that the banking system will provide the credit for our economy," Lenihan told his party's conference.

Speaking to Reuters, Lenihan said the government was focusing on how to deal with lenders' exposure to commercial property developments, which have nose-dived in value.

"We are now looking at the issue of how we can minimise risk in relation to that," he said. "It is urgent work."

He declined to give a timeframe for a plan or outline his favoured option.

Investors are waiting to see whether Dublin will follow up a plan to inject 3.5 billion euros into each of Bank of Ireland and Allied Irish Banks with a possible UK-style insurance scheme for their bad debts or the establishment of a "bad bank" to ring-fence soured assets.

Allied Irish Banks and Bank of Ireland have nearly doubled their provisions for bad debts, mostly related to loans to property developers, and investors are fearful there may be more shocks in store.

Lenihan has already demanded that high-ranking executives at the top two banks cut their pay by a third and he said on Saturday that a salary cap will be extended across other major financial players, whose deposits the government has guaranteed.

"What is paid in the banking sector is way out of line with what is paid in other areas of commerce," he said.

GREATER SACRIFICES

A poll in Saturday's Irish Independent newspaper showed that 84 percent of the public are dissatisfied with the government's handling of the banking crisis.

A larger proportion, 88 percent, believe they are being kept in the dark about the scale of the banks' problems.

"Clearly we need to get as much information about the banks out as we can," Lenihan told broadcaster RTE. "We have been doing that, we have given very detailed briefs to Europe on it."

Dublin's bailout of the banking sector comes at a time of unprecedented pain for the wider economy with Ireland facing its worst recession on record as a collapse in local property prices and crisis in the global financial system deal a double blow.

Faced with the loss of crucial property-related taxes, the government is facing a budget deficit of 9.5 percent of gross domestic product this year, the worst shortfall in the euro zone, and that is after 2 billion euros worth of spending cuts.

Lenihan said on Saturday that more tax increases and spending cuts were on the horizon.

"If we don't take the pain now greater sacrifices will be needed at a later date," he said.

Under pressure from Brussels and ratings agencies, the government needs to squeeze its deficit by 4 billion euros next year but faces an uphill battle.

Cutbacks this year, including a pension levy on public sector workers, have sent government approval ratings to record lows, triggered a one-day strike by thousands of civil servants and prompted 100,000 people to protest last weekend.